Efficiency of the tax system in Morocco: an empirical evaluation

The objective of this paper is to identify some incentive aspects of the tax system in Morocco, particularly those relating to tax expenditures and to analyze its level of economic efficiency. The evolution of this system highlights the multiplication of tax expenditures and the importance of these tax expenditures relating to VAT, followed by corporation tax, registration and stamp duties, and those related to income tax.By sector of activity, the evolution of tax expenditures reveals the large share of tax expenditures granted to the real estate sector followed by those attributed to the energy sector.The tourism and printing and publishing sectors are the least important sectors in terms of tax incentives granted compared to all sectors of activity.The analysis of the efficiency of tax expenditures according to the DEA method, by retaining tax expenditures by sector of activity in Inputs and their respective added values in Output, shows a downward trend in the average efficiency score of all sectors of activity over the 2007-2019 period, which fell from 0.6 in 2007 to 0.52 in 2019. The automotive and chemical industries and real estate industries show a relatively high degree of efficiency in the use of tax expenditures, while the publishing, printing and industrial sectors food have been shown to be less effective hence the need to consider a far-reaching reform of the tax incentive system.